Drivers across the UK will soon enjoy discounts on dozens of new electric car models after the Transport Secretary announced a £650 million grant scheme worth up to £3,750 per car.
The proclaimed goal is to put more money back in working people’s pockets and make owning an electric car a reality for thousands.
Supporting the manifesto commitment to phase out the sale of new petrol and diesel cars by 2030, the £650 million Electric Car Grant (ECG) will back UK and other manufacturers, with eligibility dependent on the highest manufacturing sustainability standards.
Discounts of up to £3,750 will be available at the point of sale for new eligible electric cars priced at or under £37,000.
Drivers will start to benefit from discounts as soon as manufacturers successfully apply for their zero-emission cars to be part of
the grant scheme from 16 July 2025, with funding available until the 2028 to 2029 financial year.
With drivers citing upfront costs as a key barrier to adoption, the grant will narrow the upfront cost between petrol and electric vehicles, giving thousands more drivers access to savings of up to £1,500 a year in fuel and running costs compared to a petrol car.
The discount means that zero-emission cars are now cheaper to buy and run than ever before and comes on top of preferential tax rates, delivering real savings for working families.
Owning and buying an electric vehicle (EV) is becoming more affordable, with two in five used electric cars sold for under £20,000 and 33 brand-new electric cars available for under £30,000.
Standing firmly on the side of British drivers, this latest investment is part of
the Government’s major plan to support motorists, including a record £1.6 billion invested to tackle potholes and freezing the fuel duty at 5 pence until spring 2026, saving the average motorist £50 to £60 over the year.
Transport Secretary, Heidi Alexander, said: “This EV grant will not only allow people to keep more of their hard-earned money – it’ll help our automotive sector seize one of the biggest opportunities of the 21st century.
“And with over 82,000 public charge points now available across the UK, we’ve built the infrastructure families need to make the switch with confidence.”
This latest scheme builds on the Government’s major £63 million package to support at home charging for households without driveways, transition NHS fleets to electric and create thousands of charge points at business depots across the country.
In total, the
Government is investing £4.5 billion to turbo-charge the switch to EVs, securing Britain’s position as a world leader in electric vehicle adoption while helping put more money in people’s pockets.
Today, the UK is already a global leader in the transition to zero-emission driving, with the largest EV market in Europe in 2024 and sales up a fifth on the previous year.
The latest update also comes as the UK hits over 82,000 public charge points nationwide – with one added every 30 minutes – giving peace of mind to drivers that they will be able to charge conveniently at home, work, or on longer journeys.
This latest move comes alongside the Zero Emission Vehicle (ZEV) Mandate, which requires manufacturers to sell increasing percentages of zero-emission vehicles each year.
Recent changes to the mandate give industry the certainty,
stability and support they’ve been asking for, alongside crucial trade deals with the US, India and the European Union following the recent global economic headwinds.
Mike Hawes, SMMT Chief Executive, said: “Today’s announcement of the return of government support for the purchase of electric vehicles is a clear signal to consumers that now is the time to switch.
“Rapid deployment and availability of this grant over the next few years will help provide the momentum that is essential to take the EV market from just one in four today, to four in five by the end of the decade.
“This announcement is a welcome response to consistent calls from the industry for more support, which will be in addition to the substantive subsidies already provided by manufacturers.
“Taken with recent announcements regarding infrastructure investments and the Industrial Strategy, the UK has the opportunity to maintain its position as a leader in both the manufacture and sale of zero-emission vehicles.”